Q&A: BNY Mellon's New CIO John Fiore

In an exclusive interview just before his promotion to CIO, Fiore shared his thoughts on technology innovation with Bank Systems & Technology.

John Fiore, who has been a technology executive at BNY Mellon for five years, most recently as CIO for Application Development, was made overall CIO yesterday. Recently, Bank Systems & Technology's editorial director Kathy Burger sat down with Fiore to talk about technology innovation at his bank, its Office of Innovation and its work with vendor partners.

BS&T: Do you think the technology community is innovative enough in developing solutions for the challenges and requirements facing the industry?

Fiore: Our work in solving business problems with our business partners helps drive technology innovation, because in understanding what our business is trying to do and understanding the magnitude of what we currently support — the data we have, the transaction processing we do, the interconnectivity that we have with markets around the world — we and our partners think about technology that could help solve those business problems in new, different and better ways, beyond application functionality. Our technology vendors to look to us and to our peers to give them ideas for their product innovation activities.

BS&T: What are the main challenges and priorities you are addressing currently in your role at BNY Mellon?

Fiore: They vary. Like any large financial services organization, we strive to have our clients utilize multiple of our products and services. The data associated with those services are kept in variety of underlying applications. One of our imperatives is to provide our clients with an aggregate view across those applications, to aggregate that data in new and different ways, and to provide insights they would not get by looking at the data through the lens of one particular application or another. So data integration, data manipulation, is always a challenge that we have because of the insatiable demand for information — not the data itself, not the transaction itself, but the understanding that can be gained by looking at information in new and different ways. So we're focusing on business intelligence and analytics in working with business partners, clients and internal customers.

Another challenge is around how we deliver our services better, faster, cheaper. In the data centers, to effectively use things like virtualization and cloud computing to provide faster provisioning and integration of infrastructure and take advantage of a more commodity-like infrastructure. To introduce a more simplified technology environment that would allow us to be better, faster, and more cost efficient at delivering our services — not just from an infrastructure, but [also from an] application development standpoint; technologies that allow us to deploy faster, test faster, and so forth. That's a challenge we all have, in response to the demands of our businesses.

BS&T: Are you seeing enough innovation and responsiveness from the vendor community? Are they able to respond to the demands you present? Is there a gap between what you need and what they are developing?

Fiore: We spend a fair amount of time with our core technology vendors (the household names you would typically work with). They present to us their product direction and the timing of when various capabilities would be available, and we provide a lot of feedback on those product roadmaps and their timing. We do frequent executive briefings, we go to their labs and see and hear about their technology innovation, and we reciprocate by talking about the sorts of things that we have on our minds, and what we're trying to do. That gets them to think about other capabilities that they might add to their product roadmaps. For example, I'm on multiple vendors' customer advisory boards and we provide very focused feedback, based on specific product roadmaps they present us and their broader technological directions. That works pretty well. I don't see, quite frankly, that there's been any drop off of ideas or innovative approaches or concepts that they're trying to move forward with. I think that's symptomatic of the fact that financial services organizations and the U.S. in general are such vast consumers of that technology. We continually stoke that stove to keep that pace of innovation going.

Having said that, the challenges that those organizations have is that they are very large and complex, [and] they have established products they can't necessarily cast to the wind, so they have a challenge of walking that tightrope of either innovating existing products introducing new products in ways that don't cannibalize the business they have through existing products. That's probably why you see larger organizations often buying smaller, venture capital-backed and private equity-backed companies companies that aren't burdened by that legacy of existing products and client bases, to complement their strategy and allow them to accelerate their ability to innovate. Though we've seen a downturn in number of those small, innovative companies, I think that's reflective of the overall environment. The venture-backed, private-equity-based arena is still very vibrant and we have regular interaction with a number of venture capital firms. They seek our input on hot technology topics. They reciprocate by providing us with information about their portfolio companies. I'm on several advisory boards with those venture capital firms for exactly that purpose.

BS&T: So Bank of New York Mellon is not averse to working with a smaller, less-proved company? Is it hard to get buy-in on the business side when there's an interesting opportunity with a start-up company?

Fiore: We're obviously very judicious about utilization of those companies, and we do a fair amount of due diligence on them, recognizing there's some incremental risk with smaller player. Having said that, the organization is receptive to looking at those types of solutions, and sometimes that's driven by a business imperative with a short window, to which we need to come up with some kind of technology solution. It's typically in those parts of the business closest to the clients, whether it be the Web-based side of things, or the data aggregation, data manipulation areas — as opposed to the core, back-end, heavy-iron transaction-processing engines.

The businesses are certainly open to us utilizing those sorts of technologies. We present to them some of these technologies and explain how they could benefit from those technologies, or how those technologies can respond to and support an imperative they have that has a relatively short window of opportunity associated with it. We've done it a number of times, in concert with our business partners. We go through with them the due diligence we've gone through to assure them we understand the organization we're dealing with and its the long-term viability.

BS&T: Are there challenges that Bank of New York Mellon is facing in terms of finding and developing a skilled IT workforce? Are you able to find the kind of talent you need?

Fiore: There's two parts to that. If we're looking for talent that has some amount of time in the workforce, a particular expertise over an extended amount of time with certain technology or subject matter, the available talent pool is good. Unfortunately, to some degree that's an offshoot of downturn in the economy.

I think where it is more challenging is [in] looking for candidates coming right out of colleges and universities. At the junior or entry level, it's more competitive, because there are fewer candidates coming out of colleges and universities today. We're all competing for a smaller population. To address that, we've established relationships with selected colleges and universities, through sponsorship of intern programs and residencies, to have more established pipelines with selected institutions of higher education.

BS&T: Are there internal programs to develop new skills among people in IT who trained in other areas of technology?

Fiore: We have a fairly robust program focused on those skill sets and functional areas of expertise we think are most important. We go through a fairly rigorous process of identifying good candidates and putting them in these rather intensive programs. At the back end they come out with a level of certification in that topic. We seek to place them in situations that would allow them to use the skills they just acquired, whether in some area of application development, business analysis, or program management.

BS&T: Is it hard to attract "the best and the brightest" to banking IT these days? And do you think there needs to be more government-sponsored initiatives to drive IT innovation and to develop more computer science and related skills coming through our universities?

Fiore: I think the individuals coming out of high school and going to college certainly see what the overall economic environment looks like. There certainly was a tremendous appeal around core financial services, given the salaries, bonuses, those sorts of things. Obviously young people are not blind to seeing those dynamics in marketplace. But, having said that, I do think there needs to be more focus and encouragement in the sciences to try to attract a larger number of individuals into those fields, whether it is computer science, software engineering or IT management. We need think about ways to increase the attractiveness of entering those fields, and I think the government perhaps can help. But I also think there needs to be some joint partnership between the industry and the higher education area to try to address that, as well.

As an example, we have worked with a number of colleges to reshape their curricula to be more directly applicable to learning to a job they might get at BNY Mellon (or a similar organization). I think this is the sort of things we in the industry ought to do more of over time.

In terms of other government intervention, obviously the government is huge consumer of IT, just as we are, and so I think the government — by what it does and what it spends money on related to technology — is another means by which technology innovation is driven. So what they're doing in defense or homeland security will have a dramatic impact on technology innovation. The other thing government can always do is provide incentives to stimulate more investment in technology innovation, through tax breaks and such.

BS&T: Innovation, especially in the financial services industry, is a loaded concept these days. With so much scrutiny and some of the issues the banking industry is facing, is innovation still a priority at BNY Mellon?

Fiore: I think even more so now, partly as result of circumstances over the last couple years. There's a lot of dialogue between the technology organization and the business around innovation, about how the businesses can use technology to create new products and services to allow us to be innovative in what we offer the marketplace. We in technology need to understand even better than we already do the nature of the businesses we support and the trends in those industries, and help them think about how they can be innovative in servicing clients through the use of technology. We can be thought leaders, addressing how we can work together to be more innovative as an organization as a whole.

We have created an Office of Innovation in the technology organization, with individuals that would, as we call it, "work the seams" across our businesses. They work across the lines of businesses to help identify technology-based products that would address those seams between the businesses, come up with new products and services and generate incremental revenue through those products and services or completely new lines of business.

The reason for setting up this Office of Innovation was that after the merger of Bank of New York and Mellon, there was a broader spectrum of products and services that each legacy organization brought to the table, which fostered this kind of thinking: How can we address the seams across those businesses that neither organization might have had prior to the merger? Three or four ideas have been incubated and are taking hold in the organization and one completely new business has been formed through the work of this group.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio